Dear ladies and gentlemen, welcome to the conference call of Idorsia regarding the Half Year Financial Results Presentation 2021. At our customer's request, this conference will be recorded. As a reminder, all participants will be in a listen-only. After the presentation, there will be an opportunity to ask questions. [Operator Instructions] May I now hand you over to Andrew Weiss, who will lead you through this conference. Please go ahead.

Thank you, Angela. Good morning, good afternoon, everyone, and welcome to the Idorsia webcast to discuss the first half '21 results published this morning at 7

00 a.m. Central European Summer Time. With me on the call o provide additional granularity on our operational, clinical and financial advancements over the first half are with me our CEO, Jean-Paul Clozel; our CFO, André Muller. They will be making prepared remarks. For the Q&A session, we will be joined by our Chief Commercial Officer, Simon Jose. Next slide. Before handing over the Mic, a few customary remarks, i.e., we will be making forward-looking statements in this call, which may or may not turn out to happen. Hence, you have been appropriately warned about the risks and benefits of investing in Idorsia shares. Next slide. Thus, without further ado, Jean-Paul, the floor is yours.

Thank you very much, Andrew. During the first six months of this year, Idorsia has made tremendous progress to become a fully fledged biopharmaceutical company. Next slide. If I see the main highlights of this first half, you will understand why I feel so confident that we're on a good track. As we have discussed already with you, the daridorexant NDA has been submitted in the U.S. The MAA has been submitted in Europe, and the submission has been also been made with Swissmedic. Ponesimod, which is a drug [indiscernible] sold by Johnson & Johnson has been approved in the U.S. and in Europe, which shows the quality of the clinical program, which was set up by Actelion and by the team, which is now within Idorsia. The clazosentan NDA has been submitted in Japan. And also, we have initiated the Phase III study with selatogrel for suspected myocardial infection. In addition, within a few months, we are going to get the results of the study, the Phase III study, the pivotal study with lucerastat and the Phase IIb of cenerimod, while we will get the results of aprocitentan in the middle of next year, but for aprocitentan, all the patients have been recruited. Next slide. So when I mentioned to become a fully-fledged biopharmaceutical company, what does it mean for us? It means mainly to foresee five strategic priorities. These are the priorities we have from day one of the creation of Idorsia, and we have not changed these priorities. So first, we wanted to deliver three products to the market, and I'm not counting into these three products, ponesimod. And you will see in the next slide, the progress of the pipeline and why we believe we can reach and maybe be better than this goal. Number two of the second strategic priority is to build a world-class commercial organization. These tasks have been given to Simon Jose, and we are progressing extremely well in order to have this infrastructure, which will allow us to market our drugs. Number three is to bring Idorsia as soon as possible to a sustainable, and I would say also to a growing profitability. We are doing everything that in the midterm, we can really become financially independent. Number fourth goal is to continue to fuel our pipeline with new discovery from our own research. I always say that drug discovery is the engine of a biopharmaceutical company. It's like in a car. In a car, you can stop the engine and you can continue to run, but you want to run very far. Without new drug discoveries, a company cannot really grow, it cannot have a future. This is why it is so important for us to continue to build our pipeline by bringing new drugs within this clinical pipeline. Finally, the fifth goal of Idorsia was to utilize state-of-the-art technologies in every, I would say, department in every areas of the Company. So you will see that we are using these new technologies not only in drug discovery, but also clinical development and in marketing. Next slide. So let's look at the pipeline. Our goal was to put on the market three new drugs, and we are really well underway. Daridorexant, our dual orexin receptor antagonist has been filed as I've mentioned. The review is ongoing and it's going, I would say, very well. Aprocitentan is a dual endothelin receptor antagonist. It is for the treatment of difficult to treat or register hypertension and resistant and the study is fully recruited, and we will get the results in the middle of next year. What I have to say, I think that we've got more than five DSMB review, and we have not heard of any safety concern. Clazosentan is a endothelin receptor antagonist, intravenous for the treatment of vasospasm and prevention -- sorry, prevention of vasospasm with aneurysmal to a -- after, sorry, aneurysmal subarachnoid hemorrhage. You have heard that we had very positive Phase III in Japan, and we are going to get the results next year of the REACT study, which is more or less a similar study performed in Europe and in the U.S. Lucerastat is tested in Fabry disease with a very interesting clinical protocol, which is evaluating not only the effect on the biomarkers but the effect also on Lucerastat on the clinical symptoms, especially the neuropathic pain, which is the main problem, clinical problem in this patient with Fabry. Selatogrel is been starting -- the Phase III study has been started. We had an SPA with the FDA, which means that the FDA agrees with the protocol that we are following for the Phase III and also with the way we are going to evaluate the effect of selatogrel in these patients. Cenerimod is our drug for lupus it's a search generation S1P1 receptor modulator, an optimized S1P1 receptor. And we are waiting the results of the Phase Ib, which could if the study is positive and consistent -- show consistent results, which could be used as a pivotal trial, which means that if this study is predicate we might have only one more study to perform before the NDA. We have also other drugs, which are moving within our pipeline. I just can mention a selective orexin one receptor antagonist for binge eating disorder, which is recruiting in Phase II and some other products coming from our drug discovery, which are in Phase I or close to initiate Phase II. Next slide. Coming back to daridorexant. I have mentioned and we have mentioned many times that the results were very consistent and show an effect of the drug during the night, improving sleep but also showing FX during the day, consistent with an improvement of daytime functioning. The drug there is now in discussions. So we are answering questions from the regulatory authorities. And I think the process is going very well. And we really should be in a position to launch in the U.S. in the beginning of next year this drug and in Europe and Switzerland later on during the year 2022. Next slide. I've mentioned also that selatogrel has started a study in a very interesting new indication, which is really to give the patient the chance to prevent this myocardial infection or to have it in a much less severe form, and this can be obtained by having him, injecting himself the platelet aggregation inhibitor, which is selatogrel. It can inject with an automatic -- with a device. And after that, it can call the ambulance, you can call the doctor and then going to the hospital to be treated. But usually, the time between the first time and the time the patient is treated within the hospital is an average three to four hours, depending, of course, if you are living in a big city or in the country, but it can be and you can imagine in the United States, especially with very long distances, it can be six hours. So we have agreed with the FDA that we are going to do a treatment -- sorry, doing a study where half of the patients will be treated with placebo, half of the patients will get this auto injector, and we treat -- be able to treat themselves why they have the first signs of a new myocardial infection because we are dealing with patients who already had a myocardial infection. So they can recognize a second incident. Next slide. So the second goal of Idorsia is to build a world-class commercial organization. We clearly are putting priorities on three regions

the U.S., Europe and the main countries in Europe and Japan. We have established affiliate in the U.S., in Radnor; in France, in Paris; in Germany, in Munich; in Italy, in Milan; in Spain, in Madrid; in the United Kingdom, in London; and for Japan in Tokyo. We have recruited the general manager, and I have to say that I'm very happy to see how many top talents we can recruit. And sometimes I wonder why we are able to attract so experienced people who have already launched several drugs, who know the market, we know the regulatory authorities, and we know the processes needed to succeed for a launch of new drugs. And frankly, I think that the recent mergers being Sagene with BMS, being Alexion bought by AstraZeneca. All these changes have freed -- have created some opportunities for people to either choose staying within large companies or joining companies like Idorsia, maybe with a little bit more entrepreneurial, maybe a little bit more risk. But certainly, with a very different culture more close to start up. Next slide. Finally, we want to utilize state-of-the-art technologies to drive innovation. And this is, for example, used in drug discovery, intelligence artificial is used now to select new drugs, to help the drug discovery process. We try to make it something that is available for all the different departments in the drug discovery department. It is also -- artificial intelligence, for example, is also used in clinical development to be able to best use our data, our data sets and the millions of data points we have created by doing studies and for example, chronic studies like daridorexant. We are trying to use the most modern technology to analyze this data and also to -- also use this information to discuss, for example, with regulatory authorities. But we are also using modern technologies for marketing. Today's social media have a huge impact. To date, it's possible to address, to select the doctors who are more likely to prescribe our drugs, but we can also inform the patients and select the patient by using the most modern tools, which can now allow to have a much better selection of the patients will require the type of drugs, which we are developing. Next slide. We want to continue to have a permanent inflow of new drugs within our pipeline, our clinical pipeline, and this is really something which is very important. I do believe that with the drugs that we have now in late-stage development, we have potential for growth for the next 10 years. But after these 10 years, we need to continue to grow, we need to have this long-term view. And the clinical development team needs to get every year one or two or three new drugs to test if we want to be able to market in the future new drugs in addition to the very rich pipeline that we have already. This drug discovery organization is still based on the single-center approach, focus on small molecules, organic chemistry, with a fully integrated research informatics, with multiple therapeutic areas. We're focused on few platforms of expertise, for example, the G protein-coupled receptors, some enzyme are our key expertise areas. And of course, with a very, very high medical input, we absolutely want to develop drugs for succeeding high medical need. Next slide. As I have mentioned, we want to bring Idorsia to sustainable profitability. How we are going to get there. Clearly, we are in a very particular situation because our revenue, we have two main streams. First, milestones and royalty streams, for example, coming from ponesimod, but also in the future, aprocitentan and hopefully from the T-type calcium channel blocker, which has been licensed out to Neurocrine. But we will have also our net sales coming from primary care from, for example, for daridorexant, but also for orphan drugs like lucerastat, clazosentan and specialty drugs like cenerimod and selatogrel. So all the organizations that we are setting up now to launch daridorexant and clazosentan in Japan is going to be leveraged when we are going to have the results of the new drugs, and we are going to be able to launch other drugs in addition to daridorexant. Next slide. Now André is going to discuss the financial numbers from the first six months of the year.

Yes. Thank you, Jean-Paul. As you rightly said, the preparation for the product launches for daridorexant and clazosentan in Japan are well underway. So let's move operator to Slide #14. It's the usual slides on how our operating and net results came about. Starting from left, we see revenue actually CHF13.8 million. I will start with a small number, which is actually CHF0.4 million corresponding to the 8% revenue sharing of initial net sales with the launch of ponesimod by Johnson & Johnson in the course of Q2. Another one, which is relating to the milestone paid by Mochida in the first half in connection with a first subject first visit of the bridging study, Phase III study in Japan for daridorexant, CHF1.6 million was recognized from CHF8.4 million paid. And all the rest, i.e., roughly slightly less than [ CHF12 million ], where our deferred revenue from previous collaboration that Idorsia entered into with J&J for aprocitentan; with Neurocrine for T-type calcium channel blocker; with Mochida, as Jean mentioned, for daridorexant co-marketing in Japan. We'll come back just in a few minutes to see non-GAAP operating expenses, CHF248 million, leading to a non-GAAP operating result of CHF234 million. If you add the depreciation and amortization of CHF8 million, stock-based compensation of CHF9 million, you end up at CHF252 million, which is our U.S. GAAP operating results. Below the EBIT, you see here a positive number, CHF8 million, mainly driven by currency exchange gain on our deposits in U.S. dollars, and we ended up with a U.S. GAAP net results of CHF243 million. Next slide 15, please. Here, you -- we provide a breakdown of the non-GAAP operating expenses. So as you can see on the right-hand side, CHF248 million. So going up significantly, mainly in SG&A. And of course, if you're looking at this CHF68 million, it breaks down between commercial with CHF32 million, significantly up with the preparation and of the upcoming launches and also G&A going slightly up, not only at the headquarter, but also in the affiliates. If I go from right to left, we -- in order to launch, we also start to build inventory in drug substance, drug product and finish product. We paid a milestone of CHF5 million in connection with the filing of clazosentan in Japan, and the development at CHF115 million went also up breaking down between clinical CHF74 million and chemical and pharmaceutical department CHF42 million. Another way to see it is actually CHF46 million functional OpEx, and really, the rest is really to the clinical assets with CHF46 million study costs, CHF40 million drug substance and CHF10 million drug growth for that. Research went slightly up with CHF54 million. So as you can see and as explained by Jean-Paul, it's really all about properly preparing the upcoming launches in the [indiscernible] region, U.S., Japan. And it has a much lower impact right now in [indiscernible] Next slide, 16, please. Just to mention our cash flow. As you know, we started the year with CHF1.2 billion liquidity. If you take into account the non-GAAP OpEx, we just discussed, the JPY8.4 million or JPY1 billion paid by Mochida in connection with the initiation of the bridging study for daridorexant in Japan. CHF17 million CapEx and CHF16 million other outflows, mainly working capital requirements. We end with a liquidity of CHF927 million by the end of June. Next Slide 17, please. Here, you have a comparison of the liquidity with the start of the year and the closing of the first half. What is important also is to see how this liquidity is broken down between different currency. CHF681 million and USD 237 million. These dollars are aimed to hedge our outflows in U.S. dollar with the upcoming launch of daridorexant in the U.S. So it's -- but it's natural hedge, I would say. It's not a U.S. GAAP accounting hedge hence, and you were alluding to it -- the fluctuation on the currency from one quarter to the other. Next Slide 18, please. Let me finish with the guidance for 2021. As you've seen, we reduced the guidance by roughly CHF20 million with functional R&D at CHF360 million, so around CHF10 million less than the previous guidance. Functional selling and G&A expenses at CHF220 million, so another CHF10 million lower than initially guided. Still an inventory build of CHF35 million, even if we had only CHF6 million in the first half and no other milestone payments except the one already paid in Q1 2021. So with this non-GAAP operating expenses, excluding of course, unforeseen events, should be around CHF620 million. If you add CHF20 million D&A and CHF25 million SBC, we would end up with a U.S. GAAP operating expenses around CHF665 million. With this, I hand over to Jean-Paul. Jean-Paul? You are on mute, Jean-Paul.

Sorry. Thank you, André. Next slide. So just this slide summarize the main milestones, which will -- which has happened and will happen in 2021 and next year. So at the beginning of this year, we had, I repeat, the filing of daridorexant in the U.S., Europe and Switzerland. We had the filing of clazosentan in Japan, and the initiation of the SOS-AMI trial for selatogrel. Now in the coming months, we are going to get the Phase III, the pivotal trial of Lucerastat. And we are also going to have the results of the Phase IIb, which can become a pivotal trial depending on the result of cenerimod. In the beginning of next year, we are going to launch daridorexant. We are also -- we should get the approval and should launch clazosentan in Japan. And in the middle of next year, we should have the result of aprocitentan in resistant hypertension and at the end of next year, the results of clazosentan. That means all our late-phase products will be -- we will have the results of all our Phase III products at the end of next year. And as you can see, the Company, Idorsia, will become a very different company. Imagine that next year, we should be a commercial organization with the launch of daridorexant. But in addition, we will have launched clazosentan in Japan and maybe have positive results with lucerastat and clazosentan in Europe and the U.S. Next slide. That means really that our goal to become a profitable company is really approaching. I think it's not in the too distant future where we are going to be able to become financially independent not only by having, of course, the ponesimod royalties, but also with our sales of daridorexant and with the sales of clazosentan in Japan. I do believe that with very daridorexant alone and clazosentan in Japan, taking into account our really strict cost control. We can become profitable with these two products alone. And of course, if lucerastat is positive and clazosentan in U.S. and Europe is also giving positive results, this organization, the organization that we are creating is going to be leveraged. And of course, our profit will grow. And in the long term, of course, the revenues from aprocitentan and cenerimod and selatogrel will really complete this financial stream of revenues. And I do believe that we have a very bright future, not only as a research and development organization that has a commercial organization with multiple breakthrough and blockbuster products. Thank you.

Thank you, Jean-Paul. This concludes our prepared remarks section for today. We have crossed the bottom half of the hour and now we can shift over to the Q&A session, where Simon Jose is going to be joining us to address them. Operator, please open the lines.

[Operator Instructions] The first question we've received is from James Gordon of JPMorgan.

James Gordon, JPMorgan. A couple on the late-stage pipeline, please. First one was just about the readout. I can see on Slide 19, it looks like we're going to get lucerastat and then cenerimod. Is that right for you or is that just illustrative and it could be either way around? So that was the first question, please. Second question was about how you're thinking about Chinese success for the two ones that are coming up. So if it's cenerimod or lucerastat. I know cenerimod, maybe we could take some comfort from what we saw on the SLEDAI score in the prior study. And the fact that you've got high dose steroids in both ARMS. And then lupus has been quite a tough indication for replicating data sets, how you're thinking about that? And then the third and final question was just, cenerimod, what's range of outcomes depending on what we see in terms of the time lines with which the product will come to market? Because I think I heard that the Phase IIb could be pivotal. So if the data is really good, does it mean it's potentially pivotal even as a study by itself? Or you still definitely need to replicate and do another study? And if you did that, would it be similar time lines for the first study. So maybe we'll be talking about like a 2025 approval or something like that. So what's the range of outcomes depending what we see for cenerimod, please?

Yes, James, thank you very much for those questions. I think we're all going to have Jean-Paul answered them. So number one, timing of lucerastat and cenerimod is it can't -- is our choice of depicting it on Slide 19, any kind of indication. What is the success and the likelihood of each of the trials reading out given the predecessor data? And what is the range of outcomes of cenerimod? Jean-Paul, do you want to address those questions?

Yes. So I think the -- just I have to say, it's plan, the reading of the results of cenerimod and lucerastat within a few days, it's falling like that. But sometimes you can't have one center, not answering. So it can be a few 1-week delay or 2-week delay. But it's basically, I don't -- I cannot tell you which one will come first, but it will be very close. The two studies will be very close. And we have more and more, of course -- we will have more and more precision when we are approaching. But that will be within a few weeks, the two studies. Now the second question, if I may, Andrew, is about what are the chances of success? How we estimate the chance of success with cenerimod and lucerastat? Just for us, cenerimod, we made our first Phase IIb. We now have done a very large study. And of course, we want to know the right dose, but also the efficacy. I think that we know the safety because the DSMB has reviewed many times this data. So I don't think there is really a safety problem, which would prevent the further use of this drug. Now I think that we are quite -- the team, we are quite optimistic, but you know that lupus is a tough disease. So we need to see the results. But we had some very clear indication in the Phase IIa. So that should be reproduced in the Phase IIb. For lucerastat, as I have said, we have never tested the effect of the drug on neuropathic pain, which is the primary end point. On the other side, now, many patients are for more than two years within the clinical trial. I do believe that if the DSMB, which is unblinded, and knows if the drug has no effect, I think that if the drug would do nothing, I think that since there are other treatments for Fabry such as enzyme therapy or some Amicus drug. I think that they would have told us to stop the study. But of course, I don't know. I have no certainty. But I think that the fact that this study is going on for now nearly three years is a very good indication. And the third question is what do we mean for us of a positive study with cenerimod. And I think it's very clear for us that for us, really what means positive is not only to get efficacy, but also to get a safety, which is really acceptable at the dose which give this effect. Of course, we could see effect and maybe only at doses, which would not be acceptable. But I think, as I have said, we have not been asked by the DSMB to, for example, stop the high dose. So I think that the safety should be okay. It will be very difficult to compare our trial with other trials because this trial, our trial has a very specific design for the corticosteroid use. As I've mentioned several times in the past, we have tried to optimize the corticosteroid use before randomization between placebo and the four doses of the drug in order to avoid interference of corticosteroid during the trial. This has not been done in too much, I know in other large Phase IIb or Phase III. And therefore, it will be very difficult to compare the results with what has been obtained. Now finally, can this study be alone sufficient for filing? I don't think so. What we have done is really to prolong the study to have also data after one year. This was at the request of the FDA. And this is in order to even better use the data of the Phase IIb. I think that really the FDA and other authorities were require another study confirmation. And of course, I believe that because we will have a very good definition and determination of the dose, to be used. This study could be smaller in terms of size than the present study. And we are doing -- we are preparing ourselves to be ready to initiate this last study as soon as possible and to interact with the regulatory authorities as soon as possible in order to get what we believe is maybe the best overall drug in lupus, which will come to the market. But let's wait for the results. And of course, we will know much more at this time.

Thank you, Jean-Paul. Thank you, James, for the questions. Operator, next question please.

Yes. The next question is from Peter Verdult of Citi.

Peter Verdult, Citi. Three questions, please. Firstly, just a clarification on cenerimod. If I look at clintrials.gov, saying primary endpoint in July. So I just wanted to make sure that the data -- if the data really come in Q4, could it come any earlier? Secondly, for André, maybe you could just speak into 2022. We've got a growing and progressing pipeline. You're getting ready for the dairy launch, yes, that all requires funding. So just to make sure that we're thinking about this correctly. If I think about Citi in consensus right now, it feels that we're probably -- you need to be aware of CHF750 million in OpEx for next year to reflect the dynamics across the pipeline and what you're doing from launch preparations. I realize this is not the medium for guidance for 2022, but can you just give us some point as to how we should be thinking about the R&D and marketing dynamics? And then lastly, on [indiscernible], I realize this is a J&J drug. But have you ever shared your perspective of the peak sales outlook for the asset? I'm only asking that in light of what is clearly a very competitive landscape and the fact that you don't have the fatigue data on the label. I just wondered if you could, Jean-Paul, whether you could share your views as to what you think the peak sale opportunity at [indiscernible] is?

Thank you, Peter. All right. So yes, on cenerimod, I think I quickly can address that. Yes, we do see fourth quarter as most likely and the clinicaltrials.gov probably needs yet to be updated. Well, André, the question on finances and 2022 outlook a bit of granularity. And then [indiscernible] Jean-Paul. André, do you want to take over the financial question?

Yes, sure. Since we are in the middle of the Olympic Games in Japan, and will take on another to hear it. It's -- we see a hole -- one hole after the other. Yes, as you can imagine, we have -- we have a midrange plan. That's also why Jean-Paul told you that we are confident with the upcoming launches that we will reach a sustainable profitability, no longer a question of if, it's more a question of when. Coming to the OpEx base for 2022. There are so many moving parts. Starting with the R&D, will we have costs relating to cenerimod with Phase III following positive results of Phase IIb and some other moving parts in R&D. When it comes to marketing and selling, yes, sure. I would say it will continue to grow, especially when beginning of 2022, we will find the serious sales force in place in the U.S. So we will, with Q3 update you on guidance for the year. Q4 would be a decent proxy part of the moving parts as I mentioned in R&D with Syneos in U.S. And globally, you can reasonably expect that the OpEx will grow in 2022. We need to have more certainty on CLO states for clazosentan. Things are progressing well in Japan. We also need to get a better understanding what could be labeled in the U.S. And then, of course, the revenue will compensate, foresee a growing OpEx base in 2022. Maybe I can take also the last one regarding change in [indiscernible]. We do not get any privileged information. I also mentioned and let's recall of the frontier demerger in connection with the change in Actelion deal. This is a drug owned by Actelion i.e. J&J. And to this extent, we are entitled to a 8% revenue sharing. Jean-Paul, maybe if you want to add your thoughts on [indiscernible] in CMS space?

I think that the [indiscernible], which has shown also a apriority to Aubagio, which has published data and setting, maybe not on the label, but certainly on fatigue. I do trust that Johnson & Johnson is one of the best marketing companies. In fact, Johnson & Johnson is very well known and renowned for its ability to market drugs. This drug is very -- has very clean and clear data. It's both in the U.S. and in Europe. And it's also, I would say, one of the few new drugs that are now coming to the market for Johnson & Johnson. So -- and it's an area, which is completely also open for Johnson & Johnson. So I really trust them, but I cannot give you numbers, but I really trust that Johnson & Johnson is going to make a success for [indiscernible].

The next question is from Rosie Turner of Barclays.

Just 2, if I may. You've spoken quite a bit about how preparations are going with the U.S. sales force and that all sounds perfectly on track and grade. Just wondering how it's going in terms of commercial preparations, ex-U.S., obviously, kind of the European approval of daridorexant will follow relatively shortly after the FDA approval kind of all things kind of continuing on the current quarter. I wonder how that's going? And then just on liquidity. Liquidity is getting a little bit tight in terms of the typical kind of of 18 months that the market looks at in terms of cash burn. Just wondering what your thoughts are there? What paths could be explored if you wanted to raised some additional CapEx for going forward?

Thank you, Rosie, for those questions. So first one, launch preparations, U.S. non-U.S. Simon, I think that the one great for you to take. And then on the liquidity, cash burn rates, André, please. Simon?

Yes. So thanks, Rosie, for the questions. Ex-U.S. the preparation for dairy launch in Europe is going very well. As Jean-Paul said we've established affiliates in the major markets. We've got general managers appointed in those markets. All of whom have got a lot experience at dealing with the payer environment and opinion leaders there. The fundamental difference in Europe for us is that we will be the first and likely, I think, only door to enter the U.S. market. So the dynamic is very different in that there has been no innovation for 20 years. And the excitement that we're seeing amongst the specialists and the opinion leader community is actually quite palpable because they have all the same concerns and worries over the use of [indiscernible] that we see in the U.S but they're yet to get their experience or hands on DORA. So there's a lot of excitement, and we're working very closely with opinion leaders as we start to develop our strategy. That's all on track, obviously, it's a few months behind the U.S. just naturally because of the regulatory time line and certainly in Europe, there will be as you're well aware, some access work to be done in countries like France and Spain. Italy is interesting because Italy in some new market is self paid. So we can get into Italy earlier than we might otherwise go in because we don't have to go through the reimbursement process .Turning to Japan and to the preparation for the clazo launch. That's all on track as well. We've got the medical teams stood up. We've got MSLs in the field. We're engaging with specialists, a high degree of excitement there. Similarly, this is a very prevalent condition. It's more than twice the incidence that we see in the rest of the world. So they're sort of acutely aware that they have a very sort of high incidence of vasospasm and SAH. And I think there's a lot of excitement in the medical community there. Because again, similarly, they've had no innovation for -- I think for [indiscernible], it was 1995 and the evidence of the efficacy of that isn't brilliant. So I think, again, I think we're on track there. And see nothing pending approval to see a successful launch in the second quarter of next year.

Thank you, Simon. André, liquidity?

Yes, liquidity. I think I made it very clear over the previous calls that were not funded to breakeven. And -- but we should not also want to be against the world. That's why we would like to have liquidity or cash covering our next 12-month cash burn at least. As you know, we are also exploring all avenues, the classical one, equity or equity-linked capital markets on top of the J&J credit facility, which we can draw down at any time. CHF 243 million, so to mention. And maybe some also other routes like royalty monetization deals for the advantage of having many assets that could be eligible to such a deal. But at the right terms, so this means also at the right timing, you would get much more value if the regulatory risk is off the table with drugs approved or on the verge to be approved following positive readout of pivotal turns. And of course, we have also out-licensing route where we could try to upfront some cash in this type of deals. So we have a variety of instruments available to us. We remain vigilant to be able to seize any opportunity if one would be attractive to us.

The next question is from Graig Suvannavejh of Goldman Sachs.

I've got 3, if I could. My first is on daridorexant, and particularly the European opportunity and while I understand perhaps the opportunity to be the first store on the market in Europe. My impression is one where perhaps the reason why others haven't been able to go there just yet is just reimbursement, pricing and the market opportunity. So could you provide just your high-level comments on how we should think about the European revenue opportunity relative to the U.S. opportunity, at least in your opinion? My second question just has to do with cenerimod and comments around what's next, assuming positive data in the fourth quarter. I've seen some pivotal Phase III programs in this syndication being sometimes as many as 1,000 patients. And I'm just wondering how -- and while I know it's early days, but if you could provide any high-level thoughts on how you're thinking of what that perhaps Phase III program might look like and whether it is just one study. And if you would need to have a relatively sizable patient population in that Phase III study. And then perhaps my last question. Well, maybe I'll let you answer those two first, and then I'll ask my third.

Okay. Thank you, Graig. On the dairy question, I would actually like to split it in 2. I'll have Simon address the opportunity and then shift over to Jean-Paul for the patient need part of it. As we do feel very somewhat puzzled sometimes about how European patients are being treated. And then cenerimod can -- Jean-Paul you repeat your comments before on the Phase III program. Simon?

Sure. Yes, Andrew. Thanks, Graig, for the question. I mean I think those two points are linked because part of the reason we see such a big opportunity is the unmet need in Europe is just as high as it is in the U.S. It is a generic market. And you're absolutely right, that means we end up with payer scrutiny. But the generic drugs that these people are dealing with have adverse events. They've got addictive properties the regulators are really concerned about their use. In fact, most of the labels of the sleep drugs in Europe limit their use to two or four weeks. In countries like Germany, they won't reimburse beyond four weeks. So they're so having such a challenge with existing treatments, I think if we have the right conversation with the payers, and we're talking about the right patient population, as you know, with the right sort of price point, then I think that the unmet need will allow us to establish a good position in Europe. What exactly that will look like from a revenue point of view, it's clearly too early to say. But I don't think -- I think if we were entering a generic market where the generics were good and well established and people didn't have concerns, which is often the case in diabetes and other areas, then fair enough. But there is such consternation and concern about the current makeup of the market and that we believe with the opinion leader backing that we're seeing that we do believe that these are challenges that are overcomable.

Maybe I can add to that, Simon. I think if you look at France, you cannot take drugs for more than eight days. It's really extremely -- you do not have -- people forget that we are doing studies with our drugs over a year and there is no chronic drug. There is no one single chronic drug approved in Europe for more than a few days. So we are going to get a unique opportunity. And I think that we should be very, very careful when we compare daridorexant to other long acting, I would say, orexin receptor antagonist because the problems of the precedent orexin receptor antagonist was a long ash life, leading to some moments in the morning and the sides, which in the U.S. have been solved by decreasing the dose and leading to much lower efficacy. So I think that we should really not forget that very direct and is sort of optimized orexin receptor antagonist. And also, when you think of the market and you think of Europe, we don't need to get 100% of the market, I would say, 15%, 20% of the market will be already leading blockbuster numbers. And this is true in the U.S. This is true in Europe. We don't need to be a 70% market share to be very successful. And that is the beauty of insomnia market. I do believe that we will grow with daridorexant for the next 40 years of market exclusivity that we have because we will never be able to treat all the patients who should be treated with a drug like daridorexant. And then maybe I can take over cenerimod question, Andrew?

Yes. Go ahead. Follow-on.

And cenerimod, we have discussed very carefully with the FDA. We have really followed all their advice in order to be completely in line with them because we know that especially this division is very keen on safety. They know that the lupus patients are sometimes [ frightened ]. And this is why we have done a huge -- it's one of the biggest, maybe the biggest Phase IIb ever done in lupus, and we have more than 400 patients treated in this study for Phase II, which -- and we are also following the patients for a year. And that was agreed with the FDA to be potentially used as the first pivotal trial, of course, depending on the results. I think that in order to be able to use it as a pivotal trial, we need to have a clear cut efficacy and safety, of course. But in this study, which we believe most likely will be positive and show -- really give us the right dose. I think we will be able to have a study on the platform with the dose with the same endpoint that we have chosen in Phase II. And I think this study will require much less than 1,000 patients, as you have mentioned. And this study also will be much easier to recruit in terms of patients because we will then put the drug for this Phase III, which will have a very well-known and described safety and efficacy.

Thank you, Jean-Paul. Graig, you had a follow-on?

Yes, I did just on the MS market. I'm just wondering the ideal positioning of your products. There's growing emergence of the anti-CD20s. I'm just trying to figure out if you have a sense of what the ideal or the target patient population is for the product?

Jean-Paul, do you want to address that?

As I said, for the MS drug for -- which MS drug you mean for ponesimod?

For ponesimod. Yes, what is -- how does its uniqueness with its PK/PD profile, rapid onset, rapid off, translate into patient utility? Who is most...

It's clearly an oral drug. So it doesn't need injection, number one. And I think that the efficacy -- And I think that the side effect profile has been well characterized in comparison with another very well established oral drug, which is Aubagio. So I think that we have many long-term data also, which are quite unique because I think that the patients have been followed for eight years. And this drug is extremely well tolerated. So I think there are many arguments to sell such a drug. You also know that this is very fastly reversible. And you can see in terms of -- in times of COVID or infections, viral infections, I think it's a very, very big advantage to have a drug where you can stop treating the patients and two or three days or maybe a week after the patient has a normal immune system or close to normal immune system. And of course, if you use a long-lasting CD20, you are going to be months at risk of this viral infection or other type of -- even other type of neocolonial risk of infection. So I think that there are many arguments and there is a very, very good market position for a drug like ponesimod, which is, in my mind, an optimized S1P1, which also doesn't lead compared to fingolimod, the same scrutiny for the cardiovascular effect that during the first days of treatment, and which is a much cleaner, I would say, sign effect profile in my mind. So let's see how Johnson & Johnson can do and can perform.

Thank you, Graig, for the questions. Operator, are there -- mindful of time, are there any questions left in the queue?

Yes. We have one last question. It is from Thibault Boutherin of Morgan Stanley.

Hello, can you hear me?

Yes, we can.

Okay. My first question is on the U.S. and [indiscernible] market and the [ drug ] in particular. I mean, since the launch of Dayvigo, we've seen -- it has been able to grow that market by about 40% volume as they have taken around incentification. They've done potentially well. Just wanted to have your comments on how you see the evolution of this market, in particular, in the context of COVID? And you launched [indiscernible] can probably the combination will have improved a little bit, but just wanted to have your thoughts on the current dynamics and what's playing out right now between Merck and SI? And then maybe just a quick question on [indiscernible]. Just wanted to know the context of the discontinuation of the natural history study in less so much price is other and how your thoughts are changing regarding this early stage assets?

Okay, Thibault, thank you for your questions. Simon, can you address the U.S. DORA dynamics and how you see Dayvigo and our large process moving forward? And then Jean-Paul, I would -- if you could address the [indiscernible], if you can.

I mean I'm assuming that the comments about the 25% and the 40% sort of growth is maybe looking at that in the context of the DORA subclass, if you will.

Yes. Yes, sorry. That's accurate.

Yes. Because I mean, clearly, the dual orexin market itself is small. I mean, suvorexant has got about a 1% market share. If you look at the uptake so far of lemborexant, I think one year in, they probably are about 1/3 of what suvorexant was at the same time point. So it's clearly struggling, we would say. And essentially, it's not helped really expand the DORA class. And that goes back to Jean-Paul's earlier comments about the PK profile of both assets in they have long half-lives that is either going to create an adverse event challenge and someone in the morning or you drop the dose and then you have an efficacy problem, which is what we've seen in the marketplace. We clearly have a very different profile and expect, therefore, to be in a very different position. In terms of COVID, I think one -- there's two ways of answering that question, I guess. One is we've clearly seen an increase in the prevalence of insomnia during COVID times. So I think if anything, COVID has bought insomnia and its prevalence into the forefront, which is no bad thing when you're about to enter that market. And then in terms of our own launch preparation, I think we're in a very good position because we're obviously building our commercial organization and our commercial model from scrap. So we're actually -- we don't have to repurpose an existing organization that was built for the old world, and we're certainly very attentive to all the digital channels that Jean-Paul has mentioned, the use of big data, do things differently. And we're certainly looking to build a commercial organization that is modern and fit for the future and sit for a world where we've seen the world, frankly, transform into a much more digital place in a very, very short space of time.

And first impact for [indiscernible], I take the question, Andrew?

Yes, please.

I think for sinbaglustat. We are really just a few months close to the lucerastat, and if we -- Lucerastat is a very good drug -- And I think if the study is positive, it will be unique. And frankly, we are a little bit hesitating can we expand, for example, the label, the indications in future studies with lucerastat or should really start with Impala, which is more powerful to have some advantages, but which is still within the same type of drugs, number one. Number two, you have seen some negative studies with the Sanofi drug. And we need really to analyze a little bit the differences between sinbaglustat and, for example, the drugs of Sanofi and really in order to really take some lessons from the negative results of Sanofi. And finally, I have to say that we have some drugs coming to the to phase -- end of Phase I then in Phase II, which has fantastic potential. We are very careful on our cost. We really -- and I would like to say that when people thing that the clinical development as we continue to grow, they are wrong. We really want to limit our clinical development cost in order to be also able to invest into our launches. But we -- most of our Phase III are finishing. And I think that we -- as I mentioned, next year, at aprocitentan, clazosentan, daridorexant, of course, but also lucerastat will be finished. And basically, the two Phase III products will be cenerimod -- in a quite limited, I don't believe in a huge study, but it would be cenerimod and selatogrel. The two Phase III products. And we are very careful before starting Phase II or Phase III with any other products in order to have a very, very strict cost control. We only want to initiate Phase II and Phase III with drugs where we are confident that not only they will -- they have a big chance of clinical success, but also they have a very large market potential.

Thank you, Jean-Paul. Thank you, Thibault. Okay. I think we've exhausted our time. operator. We don't have any further questions. I'm assuming.

No, there aren't any further questions.

Okay. So I think we've come to the end of today's call. Thank you very much for your ongoing interest in Idorsia. I'm personally looking very forward into an engaging second half of 2020 or '21, where we prepare ourselves for a market launch, move clinical assets forward. We analyze data, and we live up to our expectation and aspiration to become Europe's -- one of Europe's leading fully-fledged biopharmaceutical companies. Operator, please close down the lines.

Thank you. Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.